The trading demand under the $ARB market has been high since its launch. However, even when the $ARB market has contributed 25% of the monthly volume lately, there are still constant complaints about insufficient $ARB liquidity.
In addition, Aribtrum is at the center of the latest DeFi progression; the ecosystem has gathered a large crowd of organic users and innovative projects. As the first leveraged trading aggregator that connects leading protocols in the ecosystem, MUX is dedicated to becoming a core contributor for Arbitrum.
Proposal
MUX contributors propose to increase the target weight of $ARB in the MUXLP pool from 10% to 15%.
By increasing the target weight of pooled $ARB to 15%, the MUXLP pool can meet higher demand from traders; meanwhile, the MUX protocol can potentially become a more prominent delegated governor in the Arbitrum ecosystem.
The target weight of all pooled assets to be updated as follows:
ETH: 26% → 26%
ARB: 10% → 15%
BTC: 13% → 10%
AVAX: 2.2% → 2%
OP: 2.2% → 2%
BNB: 2.2% → 2%
FTM: 2.2% → 2%
Stablecoin: 42.2% → 41%
Next Steps
Community discussion surrounding this proposal
Community members vote to approve/disapprove this proposal
I’m concerning about the stablecoin percantage at the pool and the majors such ETH and BTC.
I know ARB utilization is too high right now and want to rise target weight to serve better liquidity to traders and also adding ARB airdrop to the LP wo needing selling it but i think the time is near to open different LP pools for different risk tier tokens.
MuxLP getting more exposure as the new weight ratios and there is no good lending protocol to short ARB to hedge MuxLP. I see the good faith here but need to think carefully while we may push some of LPers via those weight ratios.
I can’t stress this enough, the fact that MUX was fortunate enough to receive an airdrop from Arbitrum should not automatically translate into unjustifiable weight ratios and therefore more risk for LPs.
This might be an unpopular opinion but rollups like Arbitrum have a simple business model: X-Y = Revenue
X=ETH received on Arbitrum as transaction fees
Y=ETH paid by Arbitrum to batch transactions on Mainnet
The market may price Arb like an L1 token at the moment and the launch volatility may be great for the platform, but we need to maintain MUXLP as a safe and yield generating asset.
I will vote down the current proposal as 41% stable, 15% ultra volatile governance token and 36% blue-chip increases MUXLP risk profile considerably, forces future LPs to discount MUXLP APR when comparing it to GLP APR, and may inadvertently cause LP churn if implemented.
Would recommend using a verification tool like https://www.collab.land and getting MUXLP feedback on Discord for temp check before going forward with a vote.
Is there a possibility for the $arb to be added to the side of muxlp? So muxlp investors still are weighted how they have been, but can also capture more arb trading volume. Even for a smaller 1 - 2 month window while more discussions take place and arb used else where later. It will give more data points to work with for a decision and also make the arb airdrop generate revenue in the mean time.
I can see this being good publicity, more revenue, directly supports most if not all comments people have made at this point with the drop, and will also give more time to find a better role for the drop.
Would vote down on this. As a LP, I would like to have less exposure to risky assets.
And also, it’s important to use part of allocation on user growth.
The contributors agreed that it is more important not to increase the risk exposure of the MUXLP. After re-examining the risk factors based on the replies, this proposal will be postponed and won’t enter the voting process.